What is LEI?


If your company performs financial trades including forex you may have heard the term “LEI.” But what is LEI? And how does it work?

A Legal Entity Identifier (LEI) is a 20-character code used to identify legal entities participating in financial transactions such as trading stocks, bonds or forex. The LEI number functions as an international business or entity registration number that provides transparency in financial transactions through connection to key information.

Does your company deal in trading securities locally or globally? Then you need an LEI number.

In this article we provide answers to the following questions and many more:

  • What is a Legal Entity Identifier?
  • Who needs a Legal Entity Identifier in the US?
  • How do I apply for an LEI number?

Do you need an LEI number? Click here to view our LEI prices.

Mads, LEI Service
Mads Bjerggaard  

Mads holds a bachelor’s in Business Administration and Computer Science from Copenhagen Business School.
Mads has worked with complex IT-systems for more than 20 years.
Mads is also co-founder of a legal-tech company (with same owners as LEI Service).


What is an LEI?

A Legal Entity Identifier—abbreviated LEI—is a number or code that functions as an international business or entity registration number. Companies and banks can use the LEI to identify legal entities such as other companies and organizations when participating in financial transactions (e.g. trading stocks, bonds or forex).

A legal entity performing trades and transactions on the financial markets in a number of countries—including the US and the EU—is required to obtain an LEI number.

An LEI number consists of 20 characters. The number can be broken into three parts:

  • Characters 1-4: identification of the LOU (Local Operating Unit)
  • Characters 5-18: identification of the legal entity
  • Characters 19-20: verification of the identity of the legal entity

The LEI number is an alpha-numeric code based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). This 20-character code enables identification of legal entities on an international scale as well as confirmation of their identity. This offers transparency on the financial market.

Two levels of data make up the LEI:

  • Level 1: who is who?
    Information concerning the entity’s legal name, registration number, legal address and more.
  • Level 2: who owns whom?
    Relevant information relating to the entity’s ownership and ownership structure.

The LEI system is not free. An annual fee is charged for the registration of a new LEI number as well as the renewal of an existing LEI. This fee covers administration, regulations and system maintenance.


What is LEI good for?

Now that we have answered the question, “What is LEI,” the next question is: what is an LEI good for?

The LEI system enables global tracing of financial transactions and allows easy identification of legal entities and their owners. The LEI enables this by providing standardized information and a global reference system.

The LEI system was developed in 2012 as a result of the global financial crisis of 2007-2008. Its aim is to create transparency within financial systems and transactions in order to prevent money laundering and financial fraud.

Another function of the LEI is the regulation of financial factors within jurisdictions that utilize the LEI system. The goal is for the global system to become a standard system—a system that can be used across markets and countries.

Control of the LEI system is divided between three different authorities. This ensures that the system remains credible, transparent and reliable. The three authorities are as follows:

  • ROC (Regulatory Oversight Committee): a committee consisting of supervisory
    authorities upholding the governance principles of and overseeing the Global LEI
  • GLEIF (Global Legal Entity Identifier Foundation): a not-for-profit organization that
    coordinates and manages LEI numbers
  • LOU (Local Operating Unit): an LEI-issuing organization that issues LEI codes to
    legal entities

Click here to view an illustration of the LEI system.


Who needs a Legal Entity Identifier in the US?

The United States operates under a large number of regulations that request the LEI for transaction reporting. Such regulations include the Dodd Frank Act, The Commodity Exchange Act (CEA) ​ and the MiFID II directive that includes US companies trading with the EU.

As a result nearly 14% of the world’s LEIs are registered in the US financial services economy. This makes the US the world’s largest user of the LEI.

Legal entities involved in financial transactions or operating within financial systems are the primary users of the LEI. It is therefore more than likely that your US company will need to obtain an LEI number if you are transacting in the global financial system.

LLC or Sole Traders in the United States may not be legally required to obtain an LEI at this point. However, there are many benefits associated with having an LEI number. It acts as an internationally recognized identity card and boosts the credibility of your entity. And as the LEI is quickly being adopted as a global standard it is a good idea to obtain one before you need it.

Read more about how to obtain an LEI number here.

LEI prices vary depending on the service you require. New LEI numbers and renewals of existing LEIs are usually priced differently. At LEI Service we offer both renewal and registration of a new LEI code for the same price. 


How do I apply for an LEI number?

The LEI system is surrounded by legal requirements and regulations, but that does not mean that obtaining an LEI number has to be complicated. At LEI Service we make the process easy for you.

Apply for a new LEI number here.

When you enter your company number here our system will automatically collect your data from the local business register. We will then request a confirmation of the data provided. All you have to do now is wait—we will handle the application process for you. Your LEI code will be issued within 6 to 48 hours.


How do I renew my LEI number?

An LEI number must be renewed annually in order to ensure that all necessary information is up-to-date. Depending on which renewal plan you choose LEI Service can automatically renew your LEI number for you. This is done by updating the required information in the event that it is not updated with the local business register. Clients choosing our renewal service are obligated to keep us updated of any changes made to their legal entities.

You can renew your existing LEI number here.


How do I know if my LEI is valid?

If you choose our VIP / express delivery service and complete your purchase on a weekday before 11 AM Western time we will make sure that your LEI number is registered within two hours. (This service is only applicable for new LEI numbers.)

Please note that it may take up to 24 hours before your LEI number is ready for use. This is due to many banks and the global register collecting and updating LEI information on a daily basis only.


How do I search for LEI numbers? (LEI lookup)

Do you need to check the LEI number of a legal entity? Or do you want to see if your LEI number is correctly registered in the global LEI system?

You can do this by searching the GLEIF database here


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